Ms. Peterman is a specialist at the UNICEF Office of Research. Mr. Handa is a Professor in Public Policy.

Mothers and babies at an information session of the government of Ghana's LEAP 1000 cash transfer program. (Photo by Ivan Grifi)

The rise of ‘cash without strings’ and ‘basic income’ in the development policy and aid discourse has blossomed, and for good reason. The arguments for just giving cash to poor households to use as they best see fit are numerous: cash transfers reduce poverty and have widespread impacts—often larger than traditional forms of assistance—program operational costs are low and, importantly, cash provides recipients more dignity and autonomy over spending. Cash transfers have also recently been touted as a promising response in humanitarian crises as the number one recommendation of a high-level panel organized in 2015 by the Overseas Development Institute. Scholars and policymakers have gone as far as to propose and debate whether or not all development aid should be benchmarked against the impacts and cost effectiveness of cash.

Are unconditional cash transfers just a new development fad? No. In fact, unconditional grants have been around for decades. Take Africa as an example: The government of South Africa has been operating the Child Support Grant for nearly two decades (since 1998), reaching just over 11 million beneficiaries. Ethiopia’s Productive Safety Net Project (PSNP) started in 2005, and last year PSNP transferred cash to approximately 5.16 million beneficiaries. The Tanzanian Productive Social Safety Net, started in 2010 is expanding to approximately 900,000 beneficiaries this year.

Yet, the loudest voices in advocacy and evidence dissemination come from smaller NGO programs and pilot research. How do we know that these large, bureaucratic and corruption-prone government programs actually work? Well, some would argue that we have more evidence from Government programming in Africa, than in any other region in the world. For example, since 2008, a consortium of organizations under the umbrella of the Transfer Project, have conducted or have ongoing rigorous evaluations of 12 government cash transfer programs in nine countries in sub-Saharan Africa. Researchers use the gold standard of evaluation designs, randomized controlled trials (RCTs) or quasi-experimental methods paired with qualitative research to show how benefits accrue to poor households. There is now cross cutting evidence that these programs have widespread impacts on protection outcomes—including poverty and food security, health and education, the safe transition to adulthood of youth—as well as on productive domains, including labor force participation, agriculture and productive assets, and local economy multipliers.

Take Zambia’s Child Grant Programme (CGP) as an example: Originally implemented in three rural districts, starting in 2010 the program transferred an equivalent of USD $12 each month to women in households with a child under the age of five. Recently published research shows that after two years, beneficiaries had higher consumption levels, food security, cash savings and productive activity, including crop production, livestock ownership and entrepreneurship of women. Results demonstrate that households did not waste transfers or become lazy, they utilized them to improve the situation of their household.

Of course, cash is not a silver bullet—there are many dimensions of development that cash transfers cannot address—such as improving health clinics, schools or roads. In addition, there is a lot still to understand—for example, what synergies does cash have with other bundled interventions, does it matter who in the household receives the cash, and what needs to be done differently in humanitarian or fragile contexts? The field is still ripe for further research.

Researchers have highlighted two challenges as the coverage and scale of cash transfers continues to grow. The first relates to sectoral programming and the need to justify use of cash. Since cash has impacts across sectors, co-financing is needed to allow sectors to engage and report on effectiveness vis-a-vis the funds invested. The second, stems from coordination of implementation—whereby a poor household may be targeted for multiple cash transfers from different actors—thus increasing administrative costs and simultaneously decreasing equal coverage across geography and need. Following these concerns, one proposition is the formation of a fund whereby donor governments can contribute to funding competitive applications for cash implementation. The proposed objectives of the fund would both increase scale of transfers from organizations already engaged in transfers, as well as provide those who wish to start with capital for ‘experimentation.’

This is a great idea—however it also misses the elephant in the room. Development actors have spent decades investing in building capacity, political will, targeting and monitoring schemes for government programming—to allow national governments lead the fight against poverty in their own countries. Why re-invent the wheel with parallel systems? Instead, as advocated by multi-national actors, harmonization and coordination should start with governments. Basket funds could be managed at the national level, led by government and with the participation of other stakeholders. Harmonized programs would be scaled up through existing structures, with funds set aside for smaller pilots where governments could allow NGOs to bid for supplemental programming.

Does this mean small scale NGO programs should not be expanded? Certainly not—there is still an important role—for example in humanitarian settings where governments cannot move as nimbly—or for coverage to at risk groups which may fall outside the larger programs. Equally important is piloting variations in design which larger programs may not have the dexterity to test. However, if the goal is scale, harmonization and institutionalization, we cannot ignore the largest player in the game: governments themselves. Let’s put governments in the driver’s seat to fight poverty in their own countries.

Ms. Peterman is a Social Policy Specialist at the UNICEF Office of Research. Mr. Handa is a professor in the Department of Public Policy at the University of North Carolina Chapel Hill.